Neuquén takes off

There are 1,152 wells, the largest committed count in the country, on a declared plateau of 240,000 barrels per day in 2032. At that pad density the main risk stops being drilling and becomes interference: a child well badly spaced or badly sequenced depressurises the parent and takes away production that was already paid for. It is continuous diagnosis -microseismic monitoring, tracers, pressure history, respacing engineering- and in the basin it is handled by the in-house technical teams of the service multinationals, not by independent supply the operator can contract separately.

Fresh water consumption in the basin went from around 5 million litres per month in October 2020 to around 100 million in October 2023, and a single frac can require up to 30 million litres. Multiplied by 1,152 wells, the problem stops being about trucks and becomes fixed infrastructure: intake, pipeline, pumping and balancing ponds sized for a development that lasts a decade. The water and waste niche measures flowback treatment and reuse; trunk transport of fresh water to the pad has nobody quantifying it and no local supplier at that scale.

Neuquén's real rent-capture model, read in the concession decrees, is not only the royalty rate: it is a 12% royalty plus a compensation bonus, plus an infrastructure bonus, plus a stake for the state company GyP, plus surety bonds. On a USD 25,000M commitment each of those guarantees is an instrument to structure, renew and adjust over the entire life of the project. It is a financial-insurance service that requires specific knowledge of provincial regulation, and today it is underwritten by Buenos Aires insurers with no local technical counterpart.

The state company Gas y Petróleo del Neuquén comes in as a minority partner without an equivalent operating outlay, which means its result depends entirely on the costs the operator declares. A carried partner that does not audit signs whatever it is handed. With GyP holding stakes in fourteen unconventional concessions, technical audit of costs, cost recovery and investment programmes on behalf of the minority partner is a recurring service with a built-in conflict of interest: it cannot be provided by whoever already works for the operator. No niche on the map covers it.

The project declares a peak of 100,000 barrels per day but also of 12 million cubic metres per day of gas, and that associated gas is not a by-product that can be deferred: if there is nowhere to separate and condition it, the constraint ends up falling on the oil, which is what pays. The province already has the gas treatment and compression niche measured, but this project does not yet appear among those feeding it, and the committed volume is among the largest in the portfolio. The window is construction, not operation.

The concession runs for 35 years over some 380 wells. That creates an obligation almost nobody is costing today: plugging and restoring each pad at the end of its useful life, which in a long concession is either provisioned from the start or shows up as a hidden liability. The difference from the cementing and abandonment niche, which measures execution of the work, is that what is missing here comes earlier: quantifying the liability, auditing it periodically and structuring its guarantee. It is recurring professional service across three decades and it has no local supplier.

Tecpetrol operates with 90% and the state company GyP comes along with 10% without an equivalent operating outlay. As in the rest of the unconventional concessions, the minority partner's result is defined by the costs the operator declares, so independent audit of those costs and of the investment programmes is a service with structural demand and with a conflict of interest that separates it from the usual market: it cannot be provided by whoever already invoices the operator.

The resolution approving it does not approve and walk away: it requires accrediting, during the first and second year, an investment in computable assets equal to or above 20%, and reaching a floor of USD 2,000M before 1 July 2031, all under the supervision of the Energy Secretariat. On a project of USD 4,521M spread across three stages through 2041, each accreditation is recurring technical-accounting work -asset computation and valuation, documentary support, defence before the auditor- with a deadline written into the rule. It is not the same service as a supplier's registration agency: this sits on the RIGI holder's side, and today it is handled by Buenos Aires firms.

The 259 committed wells do not arrive at once: 50 through 2028, another 70 through 2031 and 139 through 2041. Each one carries its pad, its access road and its gathering pipelines, and each is negotiated with surface owners and local communities. It is continuous fieldwork over seventeen years -survey, measurement, agreement, compensation, registration- with the particularity that the final third concentrates 54% of the wells: whoever positions now serves demand that triples. No niche on the map quantifies it and there is no local supplier of the right size; notaries and generalist firms absorb it.

In the basin, more than 95% of flowback ends up in disposal wells instead of being recycled, and the five plants in Añelo that concentrate treatment received 1,022,290 m3 in 2023 -35.2% more than the previous year- operating at their limit. A development of 259 new wells pours volume onto a system that is already saturated. The water and waste niche measures TREATMENT and reuse; the other half of the problem has no owner: drilling, permitting and operating the disposal capacity that this volume will need, with the environmental permit as the real bottleneck.

The PEELP category commits the project to long-term exports, and the approved scope expressly includes treatment, storage and transport of the crude. Every volume crossing into export passes through fiscal metering and custody transfer: certified standards, traceable calibration and an independent third-party audit, because that number defines what is charged and what is taxed. Catamarca already has the niche measured for lithium; in Neuquén, with this project delivering into the export route, calibration is still resolved with laboratories from outside the province.

The project does not come on stream until 2029 or 2030, but the rich gas that will feed it is already being produced: today the chain exports as gas a value that is worth far more downstream. That time gap is the opening, and it is identified in our own midstream analysis: fractionation, propane and butane storage and LPG logistics in the interim window. Whoever builds capacity now uses it during the years when the fractionation plant does not yet exist, and afterwards is positioned as back-up capacity when it starts up.

Fractionating 2.7 million tonnes of liquids a year requires pressurised and cryogenic tankage: spheres, tanks and pressure vessels with a fabrication code, qualified welding and certified non-destructive testing. It is the highest rung of metalworking and it is exactly where local supply falls short: the province measures that only 27% of contracting goes to certified Neuquén firms against the 60% the rule requires, and pressure vessels are among the first items to be imported. The window is the project's procurement decision, not its operation.

The pipeline taking the liquids to Bahía Blanca crosses hundreds of kilometres and more than one jurisdiction, and each stretch is a separate agreement: right of way, crossings of roads, railways and watercourses, permits province by province and compensation to the surface owner. It is pure management work, prior to the first weld, that conditions the entire schedule and that nobody quantifies on the niche map. The window opens with the final investment decision and closes before construction.